1. Field of Invention
The invention provides the means for secure charge transactions. It eliminates the requirement of having to expose one's charge account number to the public. The devised pre-approval mechanism in this invention, coupled with its specially designed merchant approval methodology makes much safer charge transactions to become a reality.
2. Status of Prior Art
When credit cards were first introduced, the assumption was a face to face transaction. Both the buyer and the seller were present physically and the seller or the provider of services could verify the identity of his/her customer and verify the authenticity of the customer's signature by asking for an identification card. Later, the credit card was put to use for mail order transactions, and through lack of a password or a PIN (Personal Identification Number), the collection and verification of the card's expiry date became common practice.
The advent of the internet and selling of goods through public networks has introduced new and challenging problems, and with it lots of fraud. Stealing and copying down of credit card information goes on by some crooked employees. Offering stolen credit card numbers for sale on the internet is not rare. Whether through the internet stream, or out of a gas station pump wires, the credit card number and its expiry date, can be stolen. The 3–4 extra digits on the back of some cards is of no use in gas stations, when the card is lost, or when the card itself, is given to a vendor employee, such as a waiter, a customer service representative, or a sales clerk. The advent of SSL (Secure Socket Layer offered by Verisign and others), improve upon the theft of numbers while in transit within the internet, but again, after it reaches the vendor, the risks are the same. SSL, and similar measures taken to date, do not eliminate the potential of fraud and the theft of numbers and expiry dates, whether they be out of the sales counter or out of some web site's internet data base. This has occurred many times. In number of occasions, hackers have been able to break into several e-commerce sites and steal clients' card numbers, off computer files.
The introduction of cards with memory or recordable magnetic strips, as implemented to date, do not eliminate the credit card stolen number problem, either. Card numbers can be illegally obtained when a card is lost, stolen, or when the computer, which processes the cards, is compromised. The American Express Blue card can be mentioned as an example of this sort of a card. It is equipped with a readable RAM chip. Visa is also testing several magnetically recorded cards, but again, the card would not be totally secure when it is lost, or when their fixed numbers are exposed to third parties and the merchant employees.
A method that some banks have come up with in the recent months is to issue a temporary credit card number over the internet. This number can be used in lieu of the real card number for online purchases. Due to lack of a closed and verifiable loop between the customer's request and the merchant's approval stream, and the possibilities of “web site spoofing”, this is not a good solution against the possibility of fraud, either.